'Newsday' sale eases Tribune debt - for now

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Tribune Co.'s $650 million sale of Newsday, announced Monday, is an important step toward alleviating its debt burden -- for this year. To get favorable tax treatment, Tribune will retain a 3% stake in a joint venture to be formed containing Newsday, as well as several related assets, including Newsday.com, some regional magazines and the free New York City daily newspaper amNewYork. Cablevision will hold the other 97%. Now, the Chicago company needs to move on its next big asset sales, including the Chicago Cubs baseball team and Wrigley Field, to meet its obligations to creditors looming in 2009. Tribune needs the cash it will raise in the sale. Last December, it bought out its public shareholders in an $8.2 billion deal orchestrated by real estate mogul Sam Zell, and now it's struggling to service that debt. Zell had originally hoped to keep Tribune's newspaper and broadcasting businesses intact, but had to consider options for Newsday, following a rapid drop in the newspaper business this year. Tribune now seems to be covered on a $650 million lump-sum debt payment coming due in December as well as other near-term obligations, but analysts say it needs to get moving on other asset sales to be in shape to deliver on a $750 million debt payment due in June 2009. Another option for Tribune would be selling its roughly 30% stake in Food Network back to E.W. Scripps, which owns the rest of the rapidly growing cable TV channel. Analysts estimate that stake could be worth well above $500 million.
http://www.usatoday.com/printedition/money/20080513/2b_newsday13.art.htm


'Newsday' sale eases Tribune debt - for now